Author: azeeadmin

Drue Kataoka’s art has made it to collections in five countries and even the International Space Station. Now the artist, activist and current face of Clubhouse’s app icon is releasing her first NFT to support Asian American causes. The auction will begin on digital art marketplace Nifty Gateway at 1:30PM EST, May 13, along with a launch party on Clubhouse, and run for 24 hours. Nifty Gateway is waiving its auction fees and all proceeds will go to the Catalyst Fund for Justice (CFJ), the grant-making arm of Stand with Asian Americans, a coalition of business leaders and activists partnered with the Asian Pacific Fund.

Kataoka is known for commissioned artworks like mirror-polished steel sculptures. and art that uses virtual reality, EEG and mobile technology. One of her pieces, “Up!,” created with Sumi-e ink on mounted rice paper, was part of the first zero-gravity art exhibit at the International Space Station. She is also an activist and organizer, and has raised a total of almost $300,000 through Clubhouse for #StopAsianHate, #Clubhouse4India and #24HoursofLove for The Martin Luther King Jr. Center for Nonviolent Social Change, the non-profit started in 1968 by Coretta Scott King.

Called “In the Club: #StopAsianHate,” Kataoka’s NFT was inspired by activist communities on Clubhouse, where Kataoka leads the Art Club, one of the app’s biggest art groups with 102,000 followers.

“I’ve been passionate about leveraging Clubhouse as a medium for social change,” Kataoka said. For this project, “we want to fire on all cylinders, not just only philanthropy or not just only art, but both of those at the highest level to really serve a goal and create the most impact that we possibly can for the Asian American community.”

Kataoka is the founder and chief executive officer of Drue Kataoka Studios, which creates pieces that bring together influences from Zen Buddhism, her training in Sumi-e ink painting and Silicon Valley. Instead of art school, Kataoka went to Stanford University because she wanted to learn about tech like virtual and augmented reality, how to code and business fundamentals.

“My mantra for the past 20 years has been that art is technology and technology is art,” she told TechCrunch.

For her “genesis drop,” or first NFT release, Kataoka wanted “to be very thoughtful about the first project I did, and I’m excited that it will be this one. I’ve been watching the space very carefully and I am very bullish on crypto and NFTs. I know there’s a lot of volatility and many things that will fall away and not stand the test of time, but ultimately as a mechanism for creativity and so many important things, this will be the way of the future.”

In the Club: #StopAsianHate
100% of Historic NFT Art Drop
to benefit The Catalyst Fund for Justice @asiapacificfund

Dropping on @niftygateway
this Thu May 13th @ 10:30am PT / 1:30pm ET / 5:30pm GMT@Clubhouse launch party
@ 10:15am PT / 1:15pm EThttps://t.co/LXpbClY0Sn pic.twitter.com/KZSd08cEXI

— Drue Kataoka (@DrueKataoka) May 12, 2021

Eric Kim, co-chair of Stand with Asian Americans’ Catalyst Fund for Justice, said “the fact that Drue is willing to donate 100% of the proceeds to go towards the AAPI community is really, really meaningful. I think it’s also a beautiful expression of blockchain technology.”

Kim, who is also co-founder and managing partner of venture firm Goodwater Capital, added, “I’ve been searching for the best product market fit of the blockchain and through this project–digital art being captured, codified, securitized in non-fungible tokens, and then being utilized for the community, launched on Clubhouse even, and auctioned through a platform like Nifty Gateway–it is one of the best applications of blockchain I’ve ever seen and an amazing coordination of multiple consumer tech platforms.”

About one-minute long, “In the Club: #StopAsianHate” features an image of a Clubhouse room superimposed over a gold-colored background. User photos have been removed and a series of shifting shapes, sculpted by Kataoka in virtual reality, can be seen through the remaining spaces. At the same time, chanting from a recent street protest is played, overlaid on a recording of Kataoka’s own heartbeat. At the end, the sounds fade into wind, symbolizing air, or qi, chi, ki or prana, a vital force in many Asian cultures.

“It’s a tribute to all of the activists and community members who have really put a lot of belief and faith into this movement and who were speaking out about these issues very early on. One of the things that I feel is disturbing is that mainstream media has either turned a blind eye or sugarcoated a lot of the hate crimes going on in our community and a lot of big issues for the Asian American community,” said Kataoka. “With Clubhouse, it’s completely unfiltered and uncensored, and very early on, last year in 2020, I was hosting and listening to those conversations. We were having serious conversations that really started to take off and gather momentum synergistically with Twitter, that some of the mainstream news outlets were not interested in at the time.”

Kim said the Catalyst Fund for Justice will use a data-driven approach to finding grant recipients. Initially, it will focus on reducing hate crimes and supporting victims; workplace discrimination; the lack of Asian American representation in politics; and supporting underfunded non-profits. Some goals include introducing more Asian American history into educational curriculums, understanding how workplace bias prevents more Asian Americans from being promoted into leadership roles, and increasing the number of Asian Americans in civic organizations.

After the Atlanta shootings, Kim began working with venture capitalists, including his co-founder at Goodwater Chi-Hua Chien, GGV managing partner Hans Tung and Lightspeed Venture partner Jeremy Liew, raising $5 million from a collective of leading VCs to donate to AAPI organizations.

“Coming out of that heightened awareness and and activation, business leaders, entrepreneurs and investors started thinking, how can we do this more systematically and apply our professional skill sets to this movement,” Kim said.

Stand with Asian Americans was the result of these types of discussions, and at the end of March, the coalition outlined its mission in a full-page Wall Street Journal ad co-signed by business and political leaders including Zoom founder and CEO Steve Chen, YouTube co-founder Steve Chen, Yahoo co-founder Jerry Wang, Stitch Fix co-founder and CEO Katrina Lake and former governor of Washington and United States Secretary of Commerce Gary Locke. Stand with Asian Americans is partnered with the Asian Pacific Fund, one of the Bay Area’s most tenured AAPI non-profits, and launched the Catalyst Fund for Justice as its grant-making arm to harness the power of what is now nearly 8,000 signatories and over 100 dedicated volunteers.

In a statement, Asian Pacific Fund president and executive director Audrey Yamamoto said, “Drue Kataoka’s generous donation of her Genesis NFT drop means the world to the AAPI community as we continue to live in fear of violence and hate every time we leave our homes. The Catalyst Fund for Justice will tap into new sources of funding and use a data-driven approach to make grants that truly move the needle on addressing the greatest injustices faced by our AAPI community.”

Pomelo, a startup building a fintech-as-a-service platform for Latin America, has raised $9 million in a seed round of funding.

The Buenos Aires-based startup’s new infrastructure aims to allow fintechs and embedded finance players to launch virtual accounts and issue prepaid and credit cards via “compliant” onboarding processes.

The COVID-19 pandemic has accelerated the adoption of digital payments all over the world, and Latin America is no exception. While the majority of transactions are still done in cash, there are still over a billion cards in the region.

Cards have an estimated payments volume of $900 billion per year, and yet 95% of these transactions are being processed by local incumbents, asserts Pomelo. This is a problem the company’s founders experienced firsthand in previous roles, and are eager to solve by creating a new payments infrastructure.

“We know from previous experiences…that building a fintech, and particularly issuing cards, in Latin America is a real nightmare,” said Pomelo co-founder and CEO Gaston Irigoyen. “It takes anywhere from 12 to 18 months to launch a simple prepaid card, and unfortunately companies have to go through the painful experience of repeating the process in every market where they operate.”

Pomelo’s goal is to solve the problem by creating a new generation of financial services infrastructure that allows companies to build a fintech business and launch cards “much faster” throughout Latin America. For now, the three-month-old company is in its infancy — the pre-product phase, which makes it even more notable that the company managed to raise such a large seed round.

This round caught our eye for a few other reasons. For one, the three co-founders of the Buenos Aires-based startup were former executives at Mastercard, Google LatAm, Mercado Pago and Naranja X. CEO Irigoyen was an early employee at Google LatAm. He is also a third-time founder with two exits (one to TripAdvisor) and former CEO of Naranja X, Argentina’s largest neobank, with millions of customers. Juan Fantoni was the former director of fintech at Mastercard, where he signed issuing deals with a number of large companies. And Hernan Corral was the CPO of Naranja X and previously head of digital accounts & cards at Mercado Pago.

Next, the caliber of Pomelo’s investors. U.S.-based Index Ventures and Brazil’s monashees co-led the funding round, which also included participation from QED’s Fontes, Max Levchin’s SciFi, Latitud, Biz Stone’s Future Positive, 20VC, Addition, FJ Labs and a16z’s Angela Strange, as well as the founders of Marqeta, Rappi, Auth0, Kavak, Loft and RecargaPay.

If you’re looking for comparisons to U.S.-based fintechs, Irigoyen said it’s got a little bit of Galileo, Marqeta and Stripe in what it’s building out.

Caio Bolognesi, partner at monashees, said his firm has been very bullish on the financial infrastructure space as a whole. They were drawn to Pomelo in part because its founders had been senior tech executives at leading fintech companies in the region and because many of its portfolio companies had already manifested the need for a better solution in this space.

Index Ventures’ Mark Fiorentino agrees that the company’s founder-market fit was crucial in his firm’s decision to invest.

“They have the DNA of the most well-known payments companies within the LATAM fintech ecosystem… and have lived through the pain points and keyed in on this opportunity through firsthand experience,” he said.

In general, Fiorentino believes that while the need for embedded financial products is becoming increasingly ubiquitous in the Latin American market, it’s important to note that the region “is far from a carbon copy” of the U.S. market with different dynamics.

For one, he said, existing solutions in the Latin American market are either “outdated” offerings from legacy financial institutions or “subpar” iterations from U.S. incumbents.

“It takes over 12 months for a business to spin up a plastic or digital card for itself. And because most legacy processors are owned by banks or large financial institutions that have been around for decades, pricing is inflexible and expensive,” Fiorentino told TechCrunch. “And if that wasn’t enough of a headache, stable reliability has been a huge pain point with these issuer processors. Pomelo is building the dev-first, self-serve API solution to address this clear market need.”

Looking ahead, Pomelo plans to use its new capital in part to open offices in São Paulo, Brazil and Mexico City, and hire dozens of people in those cities as well as in its home base of Argentina. The company currently has about 15 employees, 11 of which are engineers. It of course plans to continue building out its offering.

Boston Dynamics’ robot “dogs,” or similar versions thereof, are already being employed by police departments in Hawaii, Massachusetts and New York. Partly through the veil of experimentation, few answers are being given by these police forces about the benefits and costs of using these powerful surveillance devices.

The American Civil Liberties Union, in a position paper on CCOPS (community control over police surveillance), proposes an act to promote transparency and protect civil rights and liberties with respect to surveillance technology. To date, 19 U.S. cities in have passed CCOPS laws, which means, in practical terms, that virtually all other communities don’t have a requirement that police are transparent about their use of surveillance technologies.

For many, this ability to use new, unproven technologies in a broad range of ways presents a real danger. Stuart Watt, a world-renowned expert in artificial intelligence and the CTO of Turalt, is not amused.

“I am appalled both by the principle and the dogbots and of them in practice. It’s a big waste of money and a distraction from actual police work,” he said. “Definitely communities need to be engaged with. I am honestly not even sure what the police forces think the whole point is. Is it to discourage through a physical surveillance system, or is it to actually prepare people for some kind of enforcement down the line?

“Chunks of law enforcement have forgotten the whole ‘protect and serve’ thing, and do neither,” Watts added. “If they could use artificial intelligence to actually protect and actually serve vulnerable people, the homeless, folks addicted to drugs, sex workers, those in poverty and maligned minorities, it’d be tons better. If they have to spend the money on AI, spend it to help people.”

The ACLU is advocating exactly what Watt suggests. In proposed language to city councils across the nation, the ACLU makes it clear that:

The City Council shall only approve a request to fund, acquire, or use a surveillance technology if it determines the benefits of the surveillance technology outweigh its costs, that the proposal will safeguard civil liberties and civil rights, and that the uses and deployment of the surveillance technology will not be based upon discriminatory or viewpoint-based factors or have a disparate impact on any community or group.

From a legal perspective, Anthony Gualano, a lawyer and special counsel at Team Law, believes that CCOPS legislation makes sense on many levels.

“As police increase their use of surveillance technologies in communities around the nation, and the technologies they use become more powerful and effective to protect people, legislation requiring transparency becomes necessary to check what technologies are being used and how they are being used.”

For those not only worried about this Boston Dynamics dog, but all future incarnations of this supertech canine, the current legal climate is problematic because it essentially allows our communities to be testing grounds for Big Tech and Big Government to find new ways to engage.

Just last month, public pressure forced the New York Police Department to suspend use of a robotic dog, quite unassumingly named Digidog. After the tech hound was placed on temporary leave due to public pushback, the NYPD used it at a public housing building in March. This went over about as well as you could expect, leading to discussions as to the immediate fate of this technology in New York.

The New York Times phrased it perfectly, observing that “the NYPD will return the device earlier than planned after critics seized on it as a dystopian example of overly aggressive policing.”

While these bionic dogs are powerful enough to take a bite out of crime, the police forces seeking to use them have a lot of public relations work to do first. A great place to begin would be for the police to actively and positively participate in CCOPS discussions, explaining what the technology involves, and how it (and these robots) will be used tomorrow, next month and potentially years from now.

The countdown clock keeps on ticking, and you have just three days to secure your $99 pass to TechCrunch Disrupt 2021. You read that right — $99 is all that you’ll pay, $99 is all (everybody sing)!

Silly Minions aside, you’ll snag serious savings if you buy your Disrupt 2021 pass before the deadline expires on May 14 at 11:59 pm (PT).

TechCrunch Disrupt is a massive gathering of the tech startup world’s top leaders, innovators, makers, investors, founders and ground breakers. The all-virtual platform means more global participation and exposure. It’s all designed to help early-stage founders — and the people who invest in them — build a thriving business.

The Disrupt stage features in-depth interviews and panel discussions with a who’s-who of tech talent. The Extra Crunch stage is where you’ll find a deep bench of subject-matter experts sharing practical how-to content. You’ll take away actionable insights you can put into practice now — when you need it most. Check out our roster of speakers — we’re adding more every week.

Granted, we might be a tad biased about Disrupt — of course we think it’s awesome. But your contemporaries recognize its value, too. Here’s what a few of them told us about their experience at Disrupt 2020.

There was always something interesting going on in one of the breakout rooms, and I was impressed by the quality of the people participating. Partners in well-known VC firms spoke, they were accessible, and they shared smart, insightful nuggets. You will not find this level of people accessible and in one place anywhere else. — Michael McCarthy, CEO, Repositax.

I loved the variety of topics and learning about recent technology trends as they’re happening. Disrupt gave me a whole new perspective on the ways innovation happens in big companies. — Anirudh Murali, co-founder and CEO, Economize.

Watching the Startup Battlefield was fantastic. You could see the ingenuity and innovation happening in different technology spaces. Just looking at the sheer number of other pitch decks and hearing the judges tear them down and give feedback was very helpful. — Jessica McLean, Director of Marketing and Communications, Infinite-Compute.

If watching Startup Battlefield is thrilling (and it is), imagine what it would feel like to compete — or to win. We’re still accepting applications but not for long. Want to take a shot at winning $100,000? Apply to compete in Startup Battlefield before May 13 at 11:59 pm (PT).

There’s so much more opportunity waiting for you at Disrupt 2021. Explore Startup Alley, our expo area. Better yet, exhibit there yourself and, in addition to a bunch of other perks, you might be one of only 50 exhibiting startups chosen to participate in the Startup Alley+ VIP experience. Read more about Startup Alley+ here. TechCrunch will notify selected startups at the end of June.

Time is running out, and $99 is all that you’ll pay — if you buy your Disrupt 2021 pass before Friday, May 14 at 11:59 pm (PT).

Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.

Bird Rides, the shared electric scooter startup that operates in more than 100 cities across 3 continents, said Wednesday it is going public by merging with special purpose acquisition company Switchback II with an implied valuation of $2.3 billion. The announcement confirms earlier reports, including one this week from dot.la, that Bird intended to go public via a SPAC.

Bird said it was able to raise $106 million in private investment in public equity, or PIPE, by institutional investor Fidelity Management & Research Company LLC, and others. Apollo Investment Corp. and MidCap Financial Trust provided an additional $40 million asset financing.

The transaction will enable the combined entity to retain net proceeds of up to $428 million of cash, according to Switchback, which brings $316 million cash-in-trust to the table. The announcement also provided new information about a previously undisclosed $208 million, which Bird raised privately as part of an April 2021 Senior Preferred Convertible equity offering led by Bracket Capital, Sequoia Capital and Valor Equity Partners.

When and how Bird would go public has been an item of speculation after Bloomberg reported last November that the company received “inbound interest” from SPACs.

Bird’s ride has been bumpy at times. In 2020, revenue dropped to $95 million, or 37% from the previous year. That year the company also laid off around 30% of its workforce – 406 people – for cost-saving reasons. The company may use this new access to cash to expand its European operations and pay off debt.

Most importantly, the new injection of cash may help the company finally achieve profitability. It’s a rarity amongst scooter startups, who face notoriously high overhead.

Special purpose acquisition companies, or SPACs, have become a popular route for going public amongst transportation startups. Already this year, scooter company Helbiz, which is based in Europe and the U.S., went public via SPAC in a merger with GreenVision Acquisition Corp. SPAC shell corporations allow companies to list on the NASDAQ without doing a traditional initial public offering.

On a recent episode of TechCrunch’s Equity podcast, hosts Natasha Mascarenhas and Alex Wilhelm invited Yext CFO Steve Cakebread and Latch CFO Garth Mitchell on to discuss when companies should go public, the costs and benefits of the process, and when a SPAC can make sense. Yext pursued a traditional IPO a few years back; Latch is now going public via a blank-check company combination.

The chat was more than illustrative, as we got to hear two CFOs share their views on delayed public offerings and when different types of debuts can make the most sense. While the TechCrunch crew has, at times, made light of certain SPAC-led deals, the pair argued that the transactions can make good sense.

Undergirding the conversation was Cakebread’s recent IPO-focused book, which not only posited that companies going public earlier rather than later is good for their internal operations but also because it can provide the public with a chance to participate in a company’s success.

In today’s hyper-charged private markets and frothy public domain, his argument is worth considering.

What follows is the recap for those who prefer the written word, but we’ve also embedded the entire episode below.

What the CFOs say

Cakebread said he began shaping his ideas around IPOs while working at Salesforce alongside CEO Mark Benioff while they mulling whether to take the company public.

“What we started to realize was [that] it makes you more efficient; it forces you to put systems in place; it makes you run a business as opposed to just keep getting money from people to keep growing the business,” he said. “And so from the business angle… it was always about discipline and running a business and getting going.”

As Cakebread examined other companies and served on boards, his ideas evolved. He noted that the number of listed companies on the exchanges has dropped by 50% over the last decade or so. That’s a problem.

This morning Stampli, a software platform that optimizes corporate invoice management, announced a $50 million Series C financing round, led by Insight Partners with participation from Signal Fire and Nextworld Capital.

The company launched in 2015 with the goal of simplifying the process of invoice management. Why is that needed? Services and software are purchased by employees of companies across a variety of departments. The resulting invoices then land in the finance department, a part of companies that can be a bit siloed. Finance is then left to determine a number of factors, like why something was purchased, whether it delivered, and if the invoice should it be paid at all.

Stampli turns each bill into a communications hub, connecting the folks in finance to other stakeholders on the purchase, including the vendor. Its system uses machine learning to recognize patterns around how the organization allocates cost, manage approval workflows, and what data can be extracted from invoices.

Stampli has been historically payment platform agnostic, meaning that its customers could use whatever payment method or provider they wanted. However, in early 2020, Stampli launched Direct Pay, its own payments product that solve some of the stickier problems for the accounting department. This fits into the general trend of seeing modern software companies bake a payments option into their services, adding a revenue stream to their books in the process.

Because Stampli’s core product focused on the context of individual transactions, it plays well with its payments product. For example, folks who pay through ACH (which comes at a low, flat cost) usually suffer from the fact that the payment method likes to group multiple transactions into a single sum, which removes context. That issue can make it a huge headache for accounts payable to reconcile individual purchases. But because Stampli already understands the context of individual transactions, it can fill in the blanks for accounting while still allowing them to use ACH for payments.

Of course, Stampli remains payments agnostic, letting organizations use whatever provider they’d like. Still, co-founder and CEO Eyal Feldman says that between 20 and 25 percent of Stampli’s customers use Direct Pay.

“There are all these payment providers that monetize on the payments themselves,” said Feldman. “We provide payments as a service to our customers to give them the easiest way to manage that part of the process. There is a revenue stream coming from Direct Pay but that isn’t the reason we do it. We want to turn payments into a commodity.”

Stampli will use the new funding to sprint into scaling, aiming to double the size of the business in the next year. Thus far, Stampli has about 1000 customers, and has managed $20 billion in transactions.

The latest round brings Stampli’s total amount of funding to $87 million.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

For this week’s deep dive, Alex and Danny unpacked Natasha‘s latest project: The Duolingo EC-1. The 12,000 word four-part series was published last week and is worth a read. But, until you get to it, enjoy our podcast that doubles-clicks into its most interesting bits.

Duo, Duolingo’s mascot, flying around. Image Credits: Duolingo

Here’s how it went, after we got our morning allergy banter out of the way:

• What’s an EC-1? A TechCrunch-style deep-dive into one of the startup world’s most promising, and interesting companies.
• What’s with the flying vermin up above? That’s Duolingo’s mascot. Which is a combination of hypercutness and modest menace. (You will have fun learning a language. Or the owl will visit.)
• Why did we write about Duolingo? No, it wasn’t only because Duolingo is edtech. Natasha dug into the company’s product-led growth mode, and its views on gamification, which were fascinating.
• What’s up with today’s show name? As it turns out, Duolingo has a Tinder angle. In fact, Duolingo leaned on some of the biggest companies out there when it came to design and monetization.
• And as with all edtech companies, we talked monetization and outcomes!

The Duolingo EC-1 comprises four main articles numbering 12,200 words and a reading time of 48 minutes. Here’s what’s in store:

• Part 1: Origin story “How a bot-fighting test turned into edtech’s most iconic brand, Duolingo” (3,300 words/13 minutes) — looks at how Guatemalan immigrant entrepreneur Luis von Ahn pivoted from fighting bot attacks on login screens with squiggly text to building one of edtech’s great success stories.
• Part 2: Product-led growth strategy “The product-led growth behind edtech’s most downloaded app” (3,000 words/12 minutes) — analyzes the tactics and tradeoffs that an edtech company has to evaluate as it grows from thousands to 500 million registered learners.
• Part 3: Monetization “How Duolingo became fluent in monetization” (2,800 words/11 minutes) — examines how Duolingo experimented with a variety of different business models to match its unique community, and why it chose subscription in the end.
• Part 4: New initiatives and future outlook “Duolingo can’t teach you how to speak a language, but now it wants to try” (3,100 words/12 minutes) — explores how Duolingo is launching new business lines, their chances for success, and how the company is attempting to expand its main product from basic language fluency to mastery while adding speaking skills to the mix.

And of course, use code Extra Crunch “Equity” for a sweet, and perhaps the best, discount to access this story and all of our best stuff.

Until Friday!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

The UK government has published its long-trailed (child) ‘safety-focused’ plan to regulate online content and speech.

The Online Safety Bill has been in the works for years — during which time a prior plan to require age verification for accessing online porn in the UK, also with the goal of protecting kids from being exposed to inappropriate content online but which was widely criticized as unworkable, got quietly dropped.

At the time the government said it would focus on introducing comprehensive legislation to regulate a range of online harms. It can now say it’s done that.

The 145-page Online Safety Bill can be found here on the gov.uk website — along with 123 pages of explanatory notes and an 146-page impact assessment.

The draft legislation imposes a duty of care on digital service providers to moderate user generated content in a way that prevents users from being exposed to illegal and/or harmful stuff online.

The government dubs the plan globally “groundbreaking” and claims it will usher in “a new age of accountability for tech and bring fairness and accountability to the online world”.

Critics warn the proposals will harm freedom of expression by encouraging platforms to over-censor, while also creating major legal and operational headaches for digital businesses that will discourage tech innovation.

The debate starts now in earnest.

The bill will be scrutinised by a joint committee of MPs — before a final version is formally introduced to Parliament for debate later this year.

How long it might take to hit the statute books isn’t clear but the government has a large majority in parliament so, failing major public uproar and/or mass opposition within its own ranks, the Online Safety Bill has a clear road to becoming law.

Commenting in a statement, digital secretary Oliver Dowden said: “Today the UK shows global leadership with our groundbreaking laws to usher in a new age of accountability for tech and bring fairness and accountability to the online world.

“We will protect children on the internet, crack down on racist abuse on social media and through new measures to safeguard our liberties, create a truly democratic digital age.”

The length of time it’s taken for the government to draft the Online Safety Bill underscores the legislative challenge involved in trying to ‘regulate the Internet’.

In a bit of a Freudian slip, the DCMS’ own PR talks about “the government’s fight to make the internet safe”. And there are certainly question-marks over who the future winners and losers of the UK’s Online Safety laws will be.

Safety and democracy?

In a press release about the plan, the Department for Digital, Media, Culture and Sport (DCMS) claimed the “landmark laws” will “keep children safe, stop racial hate and protect democracy online”.

But as that grab-bag of headline goals implies there’s an awful lot going on here — and huge potential for things to go wrong if the end result is an incoherent mess of contradictory rules that make it harder for digital businesses to operate and for Internet users to access the content they need.

The laws are set to apply widely — not just to tech giants or social media sites but to a broad swathe of websites, apps and services that host user-generated content or just allow people to talk to others online.

In scope services will face a legal requirement to remove and/or limit the spread of illegal and (in the case of larger services) harmful content, with the risk of major penalties for failing in this new duty of care toward users. There will also be requirements for reporting child sexual exploitation content to law enforcement.

Ofcom, the UK’s comms regulator — which is responsible for regulating the broadcast media and telecoms sectors — is set to become the UK Internet’s content watchdog too, under the plan.

It will have powers to sanction companies that fail in the new duty of care toward users by hitting them with fines of up to £18M or ten per cent of annual global turnover (whichever is higher).

The regulator will also get the power to block access to sites — so the potential for censoring entire platforms is baked in.

Some campaigners backing tough new Internet rules have been pressing the government to include the threat of criminal sanctions for CEOs to concentrate C-suite minds on anti-harms compliance. And while ministers haven’t gone that far, DCMS says a new criminal offence for senior managers has been included as a deferred power — adding: “This could be introduced at a later date if tech firms don’t step up their efforts to improve safety.”

Despite there being widespread public support in the UK for tougher rules for Internet platforms, the devil is the detail of how exactly you propose to do that.

Civil rights campaigners and tech policy experts have warned from the get-go that the government’s plan risks having a chilling effect on online expression by forcing private companies to be speech police.

Legal experts are also warning over how workable the framework will be, given hard to define concepts like “harms” — and, in a new addition, content that’s defined as “democratically important” (which the government wants certain platforms to have a special duty to protect).

The clear risk is massive legal uncertainty wrapping digital businesses — with knock-on impacts on startup innovation and availability of services in the UK.

The bill’s earlier incarnation — a 2019 White Paper — had the word “harms” in the title. That’s been swapped for a more anodyne reference to “safety” but the legal uncertainty hasn’t been swapped out.

The emphasis remains on trying to rein in an amorphous conglomerate of ‘harms’ — some illegal, others just unpleasant — that have been variously linked to or associated with online activity. (Often off the back of high profile media reporting, such as into children’s exposure to suicide content on platforms like Instagram.)

This can range from bullying and abuse (online trolling), to the spread of illegal content (child sexual exploitation), to content that’s merely inappropriate for children to see (legal pornography).

Certain types of online scams (romance fraud) are another harm the government wants the legislation to address, per latest additions.

The umbrella ‘harms’ framing makes the UK approach distinct to the European Union’s Digital Service Act — a parallel legislative proposal to update the EU’s digital rules that’s more tightly focused on things that are illegal, with the bloc setting out rules to standardize reporting procedures for illegal content; and combating the risk of dangerous products being sold on ecommerce marketplaces with ‘know your customer’ requirements.

In a response to criticism of the UK Bill’s potential impact on online expression, the government has added measures which it said today are aimed at strengthen people’s rights to express themselves freely online.

It also says it’s added in safeguards for journalism and to protect democratic political debate in the UK.

However its approach is already raising questions — including over what look like some pretty contradictory stipulations.

For example, the DCMS’ discussion of how the bill will handle journalistic content confirms that content on news publishers’ own websites won’t be in scope of the law (reader comments on those sites are also not in scope) and that articles by “recognised news publishers” shared on in-scope services (such as social media sites) will be exempted from legal requirements that may otherwise apply to non journalistic content.

Indeed, platforms will have a legal requirement to safeguard access to journalism content. (“This means [digital platforms] will have to consider the importance of journalism when undertaking content moderation, have a fast-track appeals process for journalists’ removed content, and will be held to account by Ofcom for the arbitrary removal of journalistic content,” DCMS notes.)

However the government also specifies that “citizen journalists’ content will have the same protections as professional journalists’ content” — so exactly where (or how) the line gets drawn between “recognized” news publishers (out of scope), citizen journalists (also out of scope), and just any old person blogging or posting stuff on the Internet (in scope… maybe?) is going to make for compelling viewing.

Carve outs to protect political speech also complicate the content moderation picture for digital services — given, for example, how extremist groups that hold racist opinions can seek to launder their hate speech and abuse as ‘political opinion’. (Some notoriously racist activists also like to claim to be ‘journalists’…)

DCMS writes that companies will be “forbidden from discriminating against particular political viewpoints and will need to apply protections equally to a range of political opinions, no matter their affiliation”.

“Policies to protect such content will need to be set out in clear and accessible terms and conditions and firms will need to stick to them or face enforcement action from Ofcom,” it goes on, adding: “When moderating content, companies will need to take into account the political context around why the content is being shared and give it a high level of protection if it is democratically important.”

Platforms will face responsibility for balancing all these conflicting requirements — drawing on Codes of Practice on content moderation that respects freedom of expression which will be set out by Ofcom — but also under threat of major penalties being slapped on them by Ofcom if they get it wrong.

Interestingly, the government appears to be looking favorably on the Facebook-devised ‘Oversight Board’ model, where a panel of humans sit in judgement on ‘complex’ content moderation cases — and also discouraging too much use of AI filters which it warns risk missing speech nuance and over-removing content. (Especially interesting given the UK government’s prior pressure on platforms to adopt AI tools to speed up terrorism content takedowns.)

“The Bill will ensure people in the UK can express themselves freely online and participate in pluralistic and robust debate,” writes DCMS. “All in-scope companies will need to consider and put in place safeguards for freedom of expression when fulfilling their duties. These safeguards will be set out by Ofcom in codes of practice but, for example, might include having human moderators take decisions in complex cases where context is important.”

“People using their services will need to have access to effective routes of appeal for content removed without good reason and companies must reinstate that content if it has been removed unfairly. Users will also be able to appeal to Ofcom and these complaints will form an essential part of Ofcom’s horizon-scanning, research and enforcement activity,” it goes on.

“Category 1 services [the largest, most popular services] will have additional duties. They will need to conduct and publish up-to-date assessments of their impact on freedom of expression and demonstrate they have taken steps to mitigate any adverse effects. These measures remove the risk that online companies adopt restrictive measures or over-remove content in their efforts to meet their new online safety duties. An example of this could be AI moderation technologies falsely flagging innocuous content as harmful, such as satire.”

Another confusing-looking component of the plan is that while the bill includes measures to tackle what it calls “user-generated fraud” — such as posts on social media for fake investment opportunities or romance scams on dating apps — fraud that’s conducted online via advertising, emails or cloned websites will not be in scope, per DCMS, as it says “the Bill focuses on harm committed through user-generated content”.

Yet since Internet users can easily and cheaply create and run online ads — as platforms like Facebook essentially offer their ad targeting tools to anyone who’s willing to pay — then why carve out fraud by ads as exempt?

It seems a meaningless place to draw the line. Fraud where someone paid a few dollars to amplify their scam doesn’t seem a less harmful class of fraud than a free Facebook post linking to the self-same crypto investment scam.

In short, there’s a risk of arbitrary/ill-thought through distinctions creating incoherent and confusing rules that are prone to loopholes. Which doesn’t sound good for anyone’s online safety.

In parallel, meanwhile, the government is devising an ambitious pro-competition ex ante regime to regulate tech giants specifically. Ensuring coherence and avoiding conflicting or overlapping requirements between that framework for platform giants and these wider digital harms rules is a further challenge.

With so much focus on the ‘creator economy’, and countries hit by the effects of the pandemic, the self-employed market is ‘booming’, for good or for ill. So it’s not too much of a surprise that
Collective,a subscription-based back-office for the self-employed has raised a $20 million Series A funding after launching only late last year.

The round was led by General Catalyst and joined by Sound Ventures (the venture capital fund founded by Ashton Kutcher and Guy Oseary). Collective has now raised a total of $28.65 million. Other notable investors include: Steve Chen (Founder YouTube), Hamish McKenzie (Founder Substack), Aaron Levie (founder Box), Kevin Lin (founder Twitch), Sam Yam (founder Patreon), Li Jin (Atelier Ventures), Shadiah Sigala (founder HoneyBook), Adrian Aoun (founder Forward), Holly Liu (founder Kabam), Andrew Dudum (founder Hims) and Edward Hartman (founder LegalZoom).

Ashton Kutcher said in a statement: “We’re proud to be supporting a company that’s making it easier for creators to focus on what they do best by taking care of the back office work that creates so much friction for so many early entrepreneurs. I would have loved something like this when I was getting started.”

Launched in September 2020 by CEO Hooman Radfar, CPO Ugur Kaner and CTO Bugra Akcay, Collective offers “tailored” financial services, access to advisors that oversee accounting, tax, bookkeeping, and business formation needs. There are currently 59 million self-employed workers in the U.S. (36% of US workforce) who mostly do all their own admin. So Collective hopes to be their online back office platform.

Speaking to me over email, Radfar said that the start-up fintech market tends to serve companies like them – other start-ups and growing SMBs: “Companies like Pilot have done an amazing job at building a back-office platform that handles taxes, bookkeeping and finances for start-ups. We want to offer that same great value to the underserved business-of-one community, since they are the largest group of founders in the country.”

He added: “Before Collective, consultants, freelancers, and other solo founders had to string together their back-office solution using DIY platforms like Quickbooks, Gusto, and LegalZoom. If they were lucky, they had the help of a part-time accountant to advise them. Collective makes handling finances easy with the first all-in-one platform that not only bundles these tools into one platform, but also provides the technology and team to optimize their tax savings like the pros.”

According to some estimates, the number of lone freelancers in the US is projected to make up 86.5 million, 50% of the US workforce by 2027, with the freelancer space projected to grow three times faster than the traditional workforce.

Niko Bonatsos, Managing Director of General Catalyst said: “Collective is serving the $1.2 trillion business-of-one industry by building the first back-office platform that saves individuals significant time and money, while providing them with the appropriate tools and resources they need to help them succeed,” said “We’re excited to support Collective as they expand their team and build an exceptional service for the business-of-one community.”